DoD's $60M IT labor contract to Lockheed Martin shows fair value, but limited competition context
Contract Overview
Contract Amount: $59,964,176 ($60.0M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2009-02-26
End Date: 2009-11-30
Contract Duration: 277 days
Daily Burn Rate: $216.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: IT SOLUTION SERVICES (LABOR)
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22207, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $60.0 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: IT SOLUTION SERVICES (LABOR) Key points: 1. Contract awarded under full and open competition, suggesting a broad search for qualified vendors. 2. The contract's duration of 277 days indicates a focused, short-term need for IT services. 3. The award to Lockheed Martin, a large defense contractor, points to established capabilities in complex IT solutions. 4. The contract type (Time and Materials) can pose cost control risks if not closely managed. 5. The relatively low number of bids (1) warrants scrutiny regarding the effectiveness of the competition. 6. The contract's value of approximately $60 million for IT labor services needs benchmarking against similar procurements.
Value Assessment
Rating: fair
The contract's value of $59.96 million for IT labor services appears within a reasonable range for large-scale defense IT projects. However, without specific details on the labor categories and hours, a precise value-for-money assessment is challenging. The benchmark of $216,477 for the base award suggests a significant project scope. Comparing this to similar IT labor contracts awarded by the Department of Defense or other agencies for comparable services would provide a clearer picture of its cost-effectiveness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition,' which theoretically allows all responsible sources to submit offers. However, the data indicates only one bid was received. This low number of bids, despite the broad competition type, raises questions about the solicitation's attractiveness, the market's responsiveness, or potential barriers to entry for other qualified contractors. It suggests that while the process was open, the actual competitive landscape may have been limited.
Taxpayer Impact: A limited number of bids, even in a full and open competition, can potentially lead to less favorable pricing for taxpayers as the government may have less leverage to negotiate. It also raises concerns about whether the most innovative or cost-effective solutions were explored.
Public Impact
The primary beneficiaries are the Department of Defense and its personnel, who receive enhanced IT support. The services delivered likely involve the maintenance, development, or support of critical defense IT infrastructure. The geographic impact is primarily within the Department of Defense's operational areas, likely supporting military bases or command centers. Workforce implications include the employment of IT professionals by Lockheed Martin to fulfill the contract's requirements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Low number of bids received despite full and open competition could indicate issues with the solicitation or market engagement.
- Time and Materials contract type carries inherent risk of cost overruns if not meticulously managed and monitored.
- The substantial contract value necessitates rigorous oversight to ensure efficient use of taxpayer funds.
Positive Signals
- Awarded through full and open competition, adhering to principles of broad market access.
- Contractor is a large, established entity with a significant track record in defense contracting.
- The contract addresses a clear need for IT solutions within a major federal agency.
Sector Analysis
This contract falls within the Information Technology sector, specifically focusing on IT solution services and labor. The IT services market for the federal government is substantial, with agencies heavily reliant on contractors for everything from network maintenance to software development and cybersecurity. Comparable spending benchmarks for IT labor services can vary widely based on skill sets, duration, and complexity, but contracts in the tens of millions are common for large federal IT needs. Lockheed Martin is a major player in this space, often competing for and winning large-scale government IT contracts.
Small Business Impact
The data indicates that small business participation was not a stated requirement or outcome for this contract (ss: false, sb: false). As a large prime contract awarded to a major defense contractor, there is no direct set-aside for small businesses. Subcontracting opportunities for small businesses may exist at the discretion of Lockheed Martin, but this contract does not appear to have specific provisions mandating or encouraging small business involvement. This could limit the direct economic benefit to the small business IT ecosystem from this particular award.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Army. Accountability measures would include performance metrics, delivery schedules, and adherence to contract terms. Transparency is generally facilitated through contract databases like FPDS-NG, which provide award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Defense IT Services Contracts
- Information Technology Professional Services
- Lockheed Martin Government Contracts
- Army IT Modernization Programs
- Time and Materials IT Contracts
Risk Flags
- Low Bid Count
- Time and Materials Contract Type
- NAICS Code Mismatch Potential
Tags
it-services, department-of-defense, department-of-the-army, time-and-materials, full-and-open-competition, lockheed-martin, it-labor, defense-contracting, wired-telecommunications-carriers, virginia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $60.0 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. IT SOLUTION SERVICES (LABOR)
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $60.0 million.
What is the period of performance?
Start: 2009-02-26. End: 2009-11-30.
What specific IT services were provided under this contract, and what was the breakdown of labor categories and rates?
The provided data identifies the contract as 'IT SOLUTION SERVICES (LABOR)' with a total award of $59,964,175.88. However, it does not detail the specific IT services rendered, such as network administration, software development, cybersecurity, or help desk support. Furthermore, the breakdown of labor categories (e.g., senior engineer, junior analyst, project manager) and their respective hourly or daily rates is not included in this summary. Understanding these specifics is crucial for a granular assessment of value for money and to benchmark against market rates for similar skill sets and services.
How did the government ensure fair and reasonable pricing for the Time and Materials (T&M) contract, given the potential for cost escalation?
For Time and Materials (T&M) contracts, the government typically ensures fair and reasonable pricing through several mechanisms. This includes establishing ceiling prices for labor hours and materials, negotiating fixed hourly rates based on market research and historical data, and requiring detailed documentation of all hours worked and materials used. The contracting officer must also conduct a thorough price analysis, often comparing proposed rates to independent government cost estimates or commercial price lists. Robust oversight and auditing by the government are essential to verify the accuracy of charges and prevent cost overruns. The contract's duration and the specific task orders issued would also influence the government's ability to manage costs effectively.
What factors might have contributed to only one bid being submitted for this 'full and open competition' contract?
Several factors could explain the low bid count despite the 'full and open competition' designation. The solicitation might have had highly specific or stringent requirements that limited the pool of capable contractors. The contract's scope, duration, or technical complexity could have deterred potential bidders. Alternatively, the timing of the solicitation might have coincided with other major procurements, stretching contractor resources thin. Market conditions, such as a shortage of specific IT expertise or consolidation within the industry, could also play a role. It's also possible that the pre-solicitation market research did not adequately identify all potential bidders, or that the outreach efforts were insufficient.
What is Lockheed Martin's general track record with similar IT service contracts within the Department of Defense?
Lockheed Martin Integrated Systems, LLC, as a major defense contractor, has an extensive track record of performing large-scale IT service contracts for the Department of Defense and other federal agencies. They are known for their capabilities in complex systems integration, software development, cybersecurity, and enterprise IT management. While specific performance details for this particular contract are not provided, Lockheed Martin generally possesses the resources, expertise, and security clearances necessary to execute demanding defense IT programs. Their history includes numerous multi-year, high-value contracts, indicating a capacity to manage significant IT projects, though like any large contractor, performance can vary across individual contracts.
How does this contract's value compare to other IT labor services procured by the Department of the Army in the same period?
Direct comparison of this $60 million contract to other Department of the Army IT labor services procured around the 2009 timeframe requires access to detailed historical procurement data. However, contracts of this magnitude for IT labor services were not uncommon for the DoD during that era, reflecting the ongoing need for modernization and support of complex defense systems. The specific nature of the services (e.g., specialized software development vs. general IT support) and the duration would significantly influence comparability. Without granular data on labor categories, rates, and service scope for comparable contracts, a precise benchmark is difficult. However, the value suggests a significant, potentially enterprise-wide IT support or development effort.
What are the potential risks associated with the 'Wired Telecommunications Carriers' NAICS code (517110) for this IT labor contract?
The NAICS code 517110, 'Wired Telecommunications Carriers,' is somewhat unusual for a contract described as 'IT SOLUTION SERVICES (LABOR)' awarded to Lockheed Martin. This code typically relates to companies that build the infrastructure for wired networks (e.g., telephone lines, broadband internet). If this code is accurate for the primary service, it might imply the IT labor was focused on the installation, maintenance, or management of the physical telecommunications infrastructure itself, rather than broader IT solutions like software or cybersecurity. The risk is that the NAICS code might not fully capture the scope of IT labor services, or that the services were more infrastructure-centric than anticipated, potentially leading to misaligned expectations or performance metrics if the labor was intended for higher-level IT functions.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W91QUZ05R0004
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 5290 SHAWNEE RD, ALEXANDRIA, VA, 22312
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $74,052,696
Exercised Options: $74,052,696
Current Obligation: $59,964,176
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91QUZ06D0017
IDV Type: IDC
Timeline
Start Date: 2009-02-26
Current End Date: 2009-11-30
Potential End Date: 2009-11-30 00:00:00
Last Modified: 2017-03-09
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